Is China’s GDP Overstated By 60%?

Is China’s GDP Overstated By 60%? By Lawrence Person. From a great video by Joeri Schasfoort:

University of Chicago economist Luis R. Martinez … calculates the visible difference between official stated GDP growth in 184 different countries between 1992 and 2008, and compared those numbers to the visible nighttime light from satellite imagery, and mapped the correlation. You know that South Korea/North Korea image comparison? That, but for the entire world, and mapped over time.

Autocratic countries typically reported a whopping 35% higher GDP growth numbers compared to nighttime lights growth. ...

This would mean that instead of soon becoming the second largest economy in the world, China’s economy is only about a third of the size of the mighty US economy. And it also means that predictions … that China is soon to overtake the US as the world’s next superpower are way overblown. …

That’s quite a bombshell. We might quibble about just how much China’s GDP is manipulated, but 40-60% seems a pretty solid guesstimate, and explains a whole host of observable facts, from banking and mortgage problems to tofu dregs buildings to their inability to manufacture advanced semiconductors.

When the Soviet Union dissolved in 1990, the world found out that it was a lot less impressive than outsiders thought. The CIA had been overestimating its size and military potential for decades. Which just proves that there are biases that have to be discounted.